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14.10.07

SPEND MORE, BUSH TELLS CHINA CONSUMERS

6 September 2007 (TODAY)

SYDNEY - United States President George W Bush yesterday urged China'sconsumers to spend more to help close a yawning trade gap with the US, ashe prepared to meet his Chinese counterpart Hu Jintao today.

While trade will likely top the agenda at the talks, the leaders are alsoexpected to include prickly issues such as exchange rates and reportedChinese cyber-attacks on the Pentagon, reflecting a relationship Bushtermed "complex".

"We certainly hope that China changes from a saving society to a consumingsociety," Mr Bush said, ahead of the Asia-Pacific Economic Cooperation(Apec) forum.

"Right now, because of the lack of a (social) safety net, many Chinesesave for what we call a rainy day," Mr Bush said. "What we want is thegovernment to provide more of a safety net so they start buying more USand Australian products."

Most American criticism of the surplus is focused on the value of China'scurrency - said to be kept artificially low - but Mr Bush focused onChina's high savings rates ahead of his meeting with Mr Hu.

China's enormous trade surplus with the US is a regular bone of contentionin bilateral relations, with widespread American claims that jobs arebeing lost to the massive Chinese exporting machine.

The gap with China, which has the lion's share of imports into the US,expanded to a record US$21.2 billion ($32.3 billion) in June from US$20.02billion in May, according to US official data. - AFP